Home Health Providers Must Lean Into Mitigation Strategies To Combat CMS Cuts

It’s been almost a month since the U.S. Centers for Medicare & Medicaid Services (CMS) released the CY 2024 home health payment rule, and providers and industry stakeholders are still critical of the federal agency’s misconceptions about home health.

With cuts coming, operators must lean on mitigation strategies to prepare. That’s one key takeaway from a recent webinar hosted by home-based care technology company Axxess.

In the wake of the final payment rule, industry players made waves for calling out what they viewed as CMS’ “dismissive” position when it comes to data and evidence provided by home health companies and advocacy groups.


Along these lines, some in the industry also believe that CMS has a distorted view of the home health’s profits based on faulty data.

“They have a very clear picture of an industry that they believe is getting significantly overpaid, and is just rolling in the profits, which is why they don’t seem to care about the rate cuts,” Robert Markette, a health law attorney with Hall, Render, Killian, Heath and Lyman, said during the webinar. “Their data doesn’t reflect reality, and their data comes out of flawed cost reporting, primarily, and then whatever MedPAC does to get their numbers.”

Markette noted that CMS data paints a picture of reimbursement on Medicare exceeding home health costs by 45%. The federal agency’s data also has home health costs in 2022 decreasing by 2.9%, and average margins across the industry checking in at 24.9%.


“Last year, they did not impose the entire permanent cut, which means they’re going to have to consider a temporary cut in the future, and each year they tell us that temporary cut will get larger, and they don’t see that as a problem because they think we’re making these huge profits,” Markette said. “We have to deal with that math problem.”

Although providers are still reacting to the final rule, it’s important to begin strategizing to lessen the impact of potential headwinds.

“The thing in pivoting is that we have to do more with less, and we have to figure out how to do that,” Arlene Maxim, senior vice president of clinical services at Axxess, at said during the webinar.

This means taking advantage of technology and data. It also means continuously training staff when it comes to things like OASIS.

Additionally, home health providers need to prepare for increased scrutiny, especially companies that also have hospice service lines.

“Hospice will be undergoing more audits,” Maxim said. “I believe they’re going to be looking at them much more closely.”

Mastering home health value-based purchasing will also be paramount to surviving.

“When 2025 comes around, these agencies are going to be hit with that 5% decrease because they have not met their outcomes, they have not met their goals with value-based purchasing,” Maxim said. “Perhaps some of these agencies just are going to have to close if they can’t figure out how to make this work. We can make it work — we’ve had other obstacles in our path in the past.”

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